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Chandra Prakash Taneja & Others v/s State of U.P. & Another


Company & Directors' Information:- TANEJA AND COMPANY PRIVATE LIMITED [Active] CIN = U74899DL1993PTC056551

Company & Directors' Information:- R K CHANDRA PVT LTD [Strike Off] CIN = U36911WB1989PTC046753

Company & Directors' Information:- H CHANDRA PRIVATE LIMITED [Strike Off] CIN = U65990MH1952PTC008894

Company & Directors' Information:- H C CHANDRA & CO. PVT LTD [Strike Off] CIN = U20231WB1957PTC023337

Company & Directors' Information:- PRAKASH & CO PVT LTD [Strike Off] CIN = U51909WB1938PTC009417

Company & Directors' Information:- CHANDRA AND COMPANY PRIVATE LIMITED [Dissolved] CIN = U74999KL1952PTC000280

Company & Directors' Information:- S PRAKASH AND COMPANY LIMITED [Dissolved] CIN = U99999MH1938PTC002840

Company & Directors' Information:- R. CHANDRA LIMITED [Not available for efiling] CIN = U99999MH1953PLC009175

    Application U/s 482 No. 7268 of 2020

    Decided On, 09 November 2020

    At, High Court of Judicature at Allahabad

    By, THE HONOURABLE MR. JUSTICE RAJ BEER SINGH

    For the Applicant: Krishna Mohan Garg, Pawan Kumar Bhardwaj, Pramod Bhardwaj, Advocate. For the Respondents: G.A., Arun Kumar Singh, Advocate.



Judgment Text

1. Counter affidavit on behalf of opposite party no. 2 filed in Court today, is taken on record.2. This application u/s 482 Cr.P.C. has been filed with the prayer to quash the entire criminal proceedings of Case No. 33800/2019 arising out of case crime no. 71/2018, under Sections 420, 406 IPC, P.S. Indira Puram, District Ghaziabad pending in the court of Chief Judicial Magistrate, Ghaziabad as well as to quash the charge-sheet dated 29.08.2019 and cognizance order dated 28.01.2020 passed in the aforesaid case.3. It has been argued by learned counsel for the applicants that the dispute in question is purely civil in nature and no prima facie criminal offence is made out against the applicants. It was stated that applicants are directors of J.N.C. Constructions Pvt. Ltd. and said company has successfully completed as many as 24 housing projects except the project in dispute and one more project and that there has been no complaint against the company. The company has launched the project in question under the name and style of 'J.N.C. Green Wood', Vasundhara Sector-3, Ghaziabad and construction work has started since June, 2011 and that till August, 2014, the structure of building was completed and only furnishing work was yet to be done, but the company was in shortage of funds due to recession in the market. It was further submitted that company has made all efforts to complete the construction work and to deliver the possession of flats to the buyers. It was submitted that opposite party no. 2, who has also booked a flat No. D-901 in the above-stated project in August, 2014 vide builder-buyer agreement and he has paid 95% money of consideration of said flat and possession of the same was to be given by May, 2015, but from the terms and conditions of builder-buyer agreement, it is clear that in case of delay in delivery of possession, the allottee is entitled for penalty upon company. It was submitted that merely on the basis of delay in completion of the project, no criminal offence is made out, particularly, when the delay has occasioned due to recession in the market and shortage of funds as well as due non-cooperation of authorities of Awas Vikas Parishad. The relevant documents including balance-sheet and certificate of company were handed over to the Investigating Officer, but he did not make the same part of case diary. Learned counsel submitted that from balance-sheet of company, it is clear that amount deposited by buyers has not been utilized by company for any other purpose nor the same was siphoned off by the company for the use of directors or any other work. Learned counsel submitted that in fact, the company has invested Rs. 82.23 crores in the said project, while buyers have deposited only Rs. 77.37 crores, which clearly shows the bonafideness of the company. It has been stated that investigation of the case was not impartial and fair and the relevant documents were not taken into consideration. Learned counsel submitted that mere delay in possession of flats would not give rise to a criminal offence and the dispute is purely of civil in nature and that no offence under Sections 420, 406 IPC is made out against the applicants. Further, the buyers have remedy to approach the civil court for refund of their money or for delivery of possession of flats with penalty and that they have also remedy to approach under The Real Estate (Regulations and Development) Act, 2016. Learned counsel further submitted that matter is now pending before the National Company Law Tribunal under Insolvency and Bankruptcy Code, 2016. It was submitted that once the I.R.P. has been appointed by N.C.L.T., the control of the directors has come to an end over the company. It was further submitted that once the company has not been made an accused, its directors cannot be imputed with vicarious liability. Learned counsel has submitted that in view of above-stated facts, it is clear that no prima facie case is made out against the applicants and that impugned proceedings are abuse of the process of court and thus, liable to be set aside.4. On the other hand, Sri H.N. Singh, learned senior counsel as well as learned A.G.A have opposed the application and argued that in view of the allegations made in the FIR and material collected during investigation, it cannot be said that no prima facie case is made out against the applicants. Learned senior counsel for opposite party no.2 argued that applicants are directors of M/s JNC construction Private Limited, which has collected huge funds from many persons including opposite party No.2 for booking of flats in the housing project ''J.N.C. Green Wood'', Vasundhara Sector-3, Ghaziabad, launched by the applicants company. Consequently the opposite party no. 2 as well as various other persons have booked flats in said project and that the opposite party no. 2 has deposited 95% amount of flat and similarly other buyers have also made payments. As per agreement, the possession of flats was to be delivered by May, 2015 but flats are still not ready till date. It was submitted that the company of applicants has taken land for the project in question from Awas Vikas Parishad but failed to pay the consideration of the same and accordingly Awas Vikas Parishad has issued demand notice in the tune of Rs.5 0278 3046 against the applicants. The applicants have challenged the said notice before this court by filing a writ petition but it was dismissed. An special appeal was also filed against that order, wherein applicants company was directed to deposit a sum of Rs. 35429047/ plus half of the penal interest that is Rs.180220077 in the registry of the court but applicant's company failed to do so and made default and thus said special appeal was dismissed. Earlier the applicants have also filed a writ petition against the first information report of the impugned case vide criminal misc writ petition no. 989 of 2018 but that holding that a prima facie case is made out was also dismissed. It was submitted that in view of allegations made in first information report and material collected during investigation, a prima facie case is made out against applicants. It was submitted that applicants have not come up with clean hands before this court and they have cheated a number of buyers and their funds were siphoned of. The opposite party No. 2 and a number of persons have invested their life long savings in the said project of applicants with the hope that they would have their own house but their dreams were shattered and no flat has been delivered to the opposite party No. 2 or any of the other buyer. The applicants have concealed the fact that they have taken the land of project from Awas Vikas but its consideration was not paid. This fact goes to show that the applicants have malafide intention since the very beginning. It is not a case of mere delay in delivery of flats but the facts of the matter show that the applicants have an intention to cheat the buyers on the pretext of providing flats to them. It was alleged that the funds for investors were diverted to other projects and resultantly the project could not be completed.5. I have considered rival contentions and perused record.6. The legal position on the issue of quashing of criminal proceedings is well-settled that the jurisdiction to quash a complaint, FIR or a charge-sheet should be exercised sparingly and only in exceptional cases. However, where the allegations made in the FIR or the complaint and material on record even if taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused, the charge-sheet may be quashed in exercise of inherent powers under Section 482 of the Cr.P.C. In well celebrated judgement reported in AIR 1992 SC 605 State of Haryana and others Vs. Ch. Bhajan Lal, Hon'ble Supreme Court has carved out certain guidelines, wherein FIR or proceedings may be quashed but cautioned that the power to quash FIR or proceedings should be exercised sparingly and that too in the rarest of rare cases. After noticing various earlier pronouncements, the Court enumerated certain categories of cases by way of illustration where power under 482 Cr.P.C. can be exercised to prevent abuse of the process of the Court or secure ends of justice. Paragraph 102 which enumerates 7 categories of cases where power can be exercised under Section 482 Cr.P.C. are extracted as follows:"102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."7. It is well settled that inherent jurisdiction under section 482 Cr.P.C. though wide has to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in the section itself. It is to be exercised ex debito justitiae to do real and substantial justice for the administration of which alone courts exist. Authority of the court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the court has power to prevent abuse. As noted above, the powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution.8. Recently in case of Rajeev Kourav vs. Bhaisahab & Ors. (Criminal Appeal No. 232 of 2020), decided on 11.02.2020, Hon'ble Apex Court held:''It is no more res integra that exercise of power under Section 482 CrPC to quash a criminal proceeding is only when an allegation made in the FIR or the charge sheet constitutes the ingredients of the offence/offences alleged. Interference by the High Court under Section 482 CrPC is to prevent the abuse of process of any Court or otherwise to secure the ends of justice. It is settled law that the evidence produced by the accused in his defence cannot be looked into by the Court, except in very exceptional circumstances, at the initial stage of the criminal proceedings. It is trite law that the High Court cannot embark upon the appreciation of evidence while considering the petition filed under Section 482 CrPC for quashing criminal proceedings. It is clear from the law laid down by this Court that if a prima facie case is made out disclosing the ingredients of the offence alleged against the accused, the Court cannot quash a criminal proceeding.''9. In the instant case, perusal of first information report shows that the opposite party No. 2 has booked a flat number D-901 in 'JNC Green wood housing project', launched by the company of applicants and he paid total amount of Rs 55,95,498/ against that flat by availing home loan and that applicant No.1 Chander Prakash has issued a allotment letter in his favour. Similarly a number of other buyers have also booked flats in that project by paying substantial amount of consideration. The applicants have promised to deliver possession of flats by May 2015 with clause that there may be delay of six months but no flat was delivered to the opposite party No. 2 or any of the other buyers, who have booked flats in that project. It has been further alleged that whenever opposite party No. 2 used to contact applicant Jitendra Taneja, he used to scold him. The company of applicants has neither delivered flats to the buyers nor they have returned the funds of the buyers. After investigation the charge sheet has already been filed against applicants.10. The main contention of learned counsel for applicants is that the company of applicants had successfully completed several housing projects but due to recession in the market and shortage of funds, the applicants could not complete the project in question in time and thus mere delay in delivery of flats, would not give rise to a criminal offence. The other argument put forward on behalf of the applicants is that the matter was pending before National Company Law Tribunal and that the buyers of flats have alternate remedy of approaching the NCLT or of filing civil suit or to approach appropriate authority under Real Estate Act. On the other hand the case of of the opposite party No 2 is that the applicants have malafide intention since the beginning and that they have diverted the funds of buyers in some other projects or for other purposes and they have cheated the opposite party No 2 and other buyers by obtaining money from them on pretext to booking of flats but neither flats were delivered nor their amount was returned. It is well settled position of law that criminal proceedings can only be quashed when it is shown that no prima facie case is made out. In the instant case considering the allegations made in the first information report, statements of witnesses recorded during investigation as well as documentary evidence collected during investigation, it cannot be said that no prima facie offence case is made out. It is not the case of simple delay in project but allegation is that the applicants diverted funds of buyers and they have malafide intention since beginning. Merely because the buyers have an alternate remedy to approach under Real Estate Act or to the NCLT for recovery of money, it would not undone the criminal offence made out on the basis of material on record. The avenues suggested by learned counsel for recovery of money of buyers would not vanish the culpability of applicants.11. It was next argued by learned counsel for applicants that booking of flats was made in the company ie JNC constructions Private Limited but that company has not been arraigned as an accused and thus, in the absence of company being made as accused, the criminal proceedings against applicants, who are directors of said company, can not continue. No doubt as the booking of flats was made in the name of said company but there are allegations against applicants that they have told the buyers that the flats would be delivered within the stipulated time but neither flats were delivered nor funds were returned, Thus, merely because the said company has not been made accused, it does not mean that culpability of applicants would also vanish. One important aspect of the matter is that the land for said housing project was taken from Awas vikas parishad but the consideration of land was not paid by the company and there is nothing to indicate that this fact was disclosed by the applicants to the opposite party no. 2 or other buyers of flats while booking of the flats. This fact support the contention of learned senior counsel that applicants have malafide intention since beginning.12. The next argument of learned counsel is that from balance-sheet of company, it is clear that amount deposited by buyers has not been utilized by company for any other work nor the same was siphoned off by the company for the use of directors or any other work. Learned counsel submitted that in fact, the company has invested Rs. 82.23 crores in the said project, while buyers have deposited only Rs. 77.37 crores. It has been stated that investigation of the case was not impartial and fair and the relevant documents were not taken into consideration. In this regard it may be stated that investigation does not support this fact. This contention can not be accepted that the relevant documents of company were supplied to investigating officer but the same were never made part of record. The issue that how much funds were invested in the said project, is a question of fact, which can not be adjudicated by this court in this application under section 482 CrPC.13. Perusal of record shows that opposite party no. 2 as well as a number of other buyers have got booked flats in alleged project of the applicants and most of them have paid about 90-95% of price of their respective flats by availing loan from banks. They were promised that possession of flats would be delivered in fixed time frame but neither the flats were completed nor their amount was returned. The applicants have concealed the fact that the land of project was taken from 'Avas Vikas Parishad' and its consideration was not paid by applicants. In fact, it appears from record that construction of 408 flats was being made by the applicants without any approved map from competent authorities and this fact was also concealed by the applicants. The perusal of record including statements of victims, recorded under Section 161 Cr.P.C., makes out a prima facie case against the applicants.14. The most of the submissions raised by learned counsel for the applicants call for determination on quest

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ions of fact which may be adequately adjudicated upon only by the trial court and even the submissions made on points of law can also be more appropriately gone into only by the trial court. Adjudication of questions of facts and appreciation of evidence does not fall within the arena of jurisdiction under Section 482 Cr.P.C. In view of the material on record it can also not be held that the impugned criminal proceeding are manifestly attended with mala fide and maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.15. After considering arguments raised by the learned counsel for parties and perusing the impugned charge-sheet and the materials in support of the same, this Court does not find it to be a case which can be determined or gone into in an application under Section 482 Cr.P.C. This Court cannot hold a parallel trial in an application under Section 482 Cr.P.C. Considering material on record, it cannot be said that no prima facie case is made out against applicants. Considering entire facts and position of settled law as laid down in the case of R.P. Kapur Vs. State of Punjab, A.I.R. 1960 S.C. 866, State of Haryana Vs. Bhajan Lal, 1992 SCC (Cr.) 426, State of Bihar Vs. P.P.Sharma, 1992 SCC (Cr.) 192 and Zandu Pharmaceutical Works Ltd. Vs. Mohd. Saraful Haq and another 2005 SCC (Cr.) 283 as well as recent case of Apex Court in Rajeev Kourav vs. Bhaisahab & Ors. (Criminal Appeal No. 232 of 2020), decided on 11.02.2020, no case for quashing of impugned proceedings or impugned order is made out.16. It is well settled that the power under section 482 Cr.P.C has to be exercised by the High Court, inter-alia, to prevent abuse of the process of any court or otherwise to secure the ends of justice. Though the powers possessed by the High Court under Section 482 of Cr.P.C. are very wide but the very plenitude of the power requires great caution in its exercise. The inherent power can not be exercised to stifle a legitimate prosecution.17. Accordingly, the application under section 482 Cr.P.C. is hereby dismissed.
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